July 1 Deadline for Health Plan Website Disclosures
The Departments of Labor, Health and Human Services and the Treasury recently issued FAQs About Affordable Care Act Implementation Part 53 (FAQ), which provides additional guidance for non-grandfathered group health plans and health insurance issuers on the requirement to post machine-readable files relating to rates and charges by July 1, 2022. This is a significant undertaking, and employers who sponsor self-insured group health plans should in particular take steps to make sure their third-party administrators will be able to post the information on time.
The transparency in coverage final rules generally require that non-grandfathered group health plans and health insurance issuers disclose, on a public website, information regarding in-network rates for covered items and services, out-of-network allowed amounts and billed charges for covered items and services, and negotiated rates and historical net prices for covered prescription drugs in three separate machine-readable files. The machine-readable file requirements of the rules are applicable for plan years beginning on or after January 1, 2022. However, the departments previously announced that they will defer enforcement of the requirements related to machine-readable files disclosing in-network and out-of-network data until July 1, 2022.
Alternative Fee Arrangements
The rules require plans and issuers to publish all applicable rates, which may include one or more of the following: negotiated rates, underlying fee schedule rates, or derived amounts for all covered items and services in the in-network rate file. Since the rules were issued, plans and issuers have raised concerns about how certain alternative fee arrangements are disclosed. More specifically, they raised concerns about alternative reimbursement arrangements for which reporting a current and accurate dollar amount for items and services in the in-network rate file before the item or service is provided or rendered may not be possible. To address these situations, the departments have provided an enforcement safe harbor for satisfying the reporting requirements for plans and issuers that use alternative reimbursement arrangements that do not permit the plans and issuers to derive with accuracy specific dollar amounts contracted for covered items and services in advance of the provision of that item or service, or that otherwise cannot disclose specific dollar amounts.
The FAQ applies the safe harbor through responses to two questions. The first question is: “In the In-network Rate File, how can plans and issuers report applicable rates for specific items or services provided under “percentage-of-billed-charges” contracts if an exact dollar amount cannot be determined for those items or services prospectively?” In response, the departments state that plans and issuers may report a percentage in lieu of a dollar amount. For example, if a negotiated arrangement for a particular item or service provides for reimbursement for 70% of billed charges, and the plan or issuer is unable to ascertain the dollar amount that will be billed for the item or service in advance, the departments will permit the plan or issuer to report the in-network rate using the applicable percentage of 70.
The second question is: “In the In-network Rate File, how can plans and issuers report applicable in-network rates for items and services provided under alternative reimbursement arrangements that are not supported by the schema or require additional context to be understood?” In response, the departments state that plans and issuers may disclose in an open text field a description of the formula, variables, methodology, or other information necessary to understand the arrangement. The open text field may be utilized for reporting only if the schema — as provided in the departments’ technical implementation guidance — does not otherwise support the arrangement.
The FAQ provides helpful guidance in addressing the disclosure requirements for alternative reimbursement arrangements. However, it is likely that more issues will arise in finalizing the disclosures, and July 1 will be here before you know it.